EU

Commission opens investigation into acquisition by Caterpillar of MWM

The European Commission (the Commission) has begun a Phase II investigation into the acquisition of German engine maker MWM Holdings GmbH by Caterpillar Inc., a US manufacturer of machinery, engines and related parts.

The proposed transaction did not initially qualify for review by the Commission under the European Merger Regulation (ECMR) but rather was subject to the jurisdiction of certain national competition authorities. The Commission examined the merger in response to a request under Article 22 of the ECMR from the German competition authority for the Commission to take jurisdiction over the case, based on the effect it would have on trade between Member States and the significant threat of an effect on competition within Germany. The competition authorities of Austria and Slovakia then joined in the request. The Commission’s initial investigation showed that the proposed transaction would combine two leading suppliers of generator sets in Europe, in particular, for generator sets which run on gas.  

Due to concerns that remaining rival firms would exert insufficient competitive restraint over the merged firm and concerns regarding a potentially negative effect on innovation, the Commission initiated its Phase II investigation on 5 May with a provisional deadline of 16 September 2011. IP/11/543, 5 May 2011  

UK

Competition Commission provisionally clears Irish Sea ferries merger

The Competition Commission (the CC) has provisionally cleared the acquisition by Stena AB of two Irish Sea ferry routes from DFDS A/S.

As we reported in our February bulletin, the Office of Fair Trading (the OFT) referred the merger to the CC amid concerns that it would substantially lessen competition for the supply of freight and passenger ferry services between the North West of England and Northern Ireland. The investigation centred on Stena’s routes between Liverpool and Belfast and Heysham and Belfast.

Stena and DFDS both operated ferry services on the Irish Sea on a variety of routes. In December 2010 – the same month in which the merger was completed – Stena closed a route it operated between Fleetwood and Larne. The OFT believed that this withdrawal may have been linked to the merger, and may have caused a lessening of competition in the market as a whole. The CC found that, in fact, Stena would have been forced to close the Fleetwood to Larne route in any case for commercial reasons.

The CC also concluded that Stena would face a direct competitor in each of the route corridors (i.e. Liverpool and Belfast and Heysham and Belfast) after the merger, and therefore the merger was unlikely to result in a substantial lessening of competition. 28/11, 25 May 2011